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Overhaul of petroleum policy in pipeline
Reliance Energy to merge with REVL
4 bidders vie for Maruti stake
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Sensitive list may put spanner in regional trade
Cellphone companies target countryside
CII wants faster economic reforms for growth
Leyland strikes deal with Lankan firm
PNB regional office upgraded
Haryana reserves 10 pc industrial plots for NRIs
Bank Account
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Overhaul of petroleum policy in pipeline
New Delhi, January 3 The policy will take into consideration the recommendations of the Rangarajan committee, which had been asked to submit its report by the end of this month. The Rangarajan committee, which already had five rounds of discussions with different groups, will meet the newly-appointed Secretary M S Srinivasan on January 5 to fine-tune its recommendations, which will be considered by the Prime Minister to finalise the long-term pricing policy, senior officials of the Petroleum Ministry said. The existing policy had affected consumers as well as oil companies more than the governments as their revenues had risen sharply in past five years because of high volatility. According to officials of the ministry, the Central Government revenue in the past five years had gone up from Rs 40,000 crore to over Rs 75,000 crore from the petroleum sector despite reduction in duties on several occasions. The state government revenue also increased sharply to Rs 40,000 crore from Rs 20,000 crore. Oil companies under recoveries had also gone up sharply as the government did not permit oil companies to raise prices in tandem with the increase in prices in the international markets. As a result, under recoveries had gone up to Rs 39,000 crore in the current financial year mainly due to higher losses on the sale of LPG and kerosene by oil marketing companies. Meanwhile, the newly appointed Petroleum Secretary said that the prices of four major petroleum products — petrol, diesel, LPG and kerosene — will not change till the end of the current financial year. He said that after receiving the recommendations of the Rangarajan committee, it would be discussed at the highest level to formulate the new pricing policy.
— UNI
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Reliance Energy to merge with REVL
Mumbai, January 3 Under the proposed scheme of amalgamation, a share exchange ratio of 7.5 equity shares of the face value of Rs.10 each of REL for every 100 equity shares of the face value of Rs.10 each of REVL (after the allotment of shares pursuant to the demerger of RIL). The share exchange ratio is based on the number of shares of REL held by REVL, and is as recommended by the leading international firm, KPMG. The shares of REL, held by REVL, will be cancelled under the proposed scheme of amalgamation. The fully diluted equity capital of REL will remain at approximately Rs 228 crore (excluding the impact on conversion of foreign currency convertible bonds issued by the company). The benefits of the proposed scheme is direct shareholding of Reliance Energy by 23 lakh Reliance shareholders, leading to enhancement of their value, elimination of dual listing of REL and REVL, elimination of potential “holding company” discount through REVL market price, increased liquidity for all Reliance Energy shareholders and wider domestic and international shareholder base for REL. The fully diluted equity capital of the company will remain at approximately Rs 228 crore, it said. The proposed scheme of amalgamation is subject to the approvals of the Board of REVL, the shareholders of the company and REVL, the stock exchanges, the Mumbai High Court and all other requisite permissions, sanctions and approvals. Meanwhile, in a separate development a group of investors led by Bhumika Trading Private Ltd today said, it along with other investors, acquired 2.23 crore equity shares of Reliance Industries Ltd. Bhumika acquired the shares along with Eklavya Mercantile Private Limited, Ekansha Enterprise Private Limited and Ornate Traders Private Limited, constituting a “group” under the takeover regulations, it informed the Bombay Stock Exchange.
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4 bidders vie for Maruti stake
New Delhi, January 3 Only public sector financial institutions and banks have been allowed to
bid for the stake, with the minimum bid value fixed at Rs 10 crore. The offer has a lock-in period of six months. A Group of Ministers (GoM) on Disinvestment is expected to meet on January 5 to finalise the base price for shortlisting bids. The government is likely to decide on January 12 the winning bids for the sale of its 8 per cent stake in Maruti Udyog Ltd. The financial institutions are looking at the offer of sale as an opportunity to acquire a large number of shares of a good company at an attractive price. The PSU institutions have to submit their expressions of interest for the government’s 8 per cent stake by January 4. Bank of India, Life Insurance Corporation, Punjab National Bank and IDBI have already submitted their expressions of interest. At present, the LIC holds a 3.31 per cent stake in Maruti. According to officials, there is a possibility that the entire 8 per cent stake is given to a single bidder. After the sale, the government will be left with a 10.28 per cent stake in Maruti. The government holds 52,824,020 equity shares with a face value of Rs 5 each, representing 18.28 per cent of the company’s
equity. Of these, 23,112,804 shares are to be sold off. The government is expected to garner Rs 1,500 crore if the shares are sold at the current market price.
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Biofuel acceptable, says IOC chief
Chandigarh, January 3 This was stated by Mr Sarthak Behuria, Chairman of IndianOil Corporation (IOC), here today. He was in the town to dedicate the first Xtra Care outlet of the IOC in
the city. Mr Behuria said that the company would accept bio-fuel provided it fits the norms and the price was “in range”. He pointed out that the government, too, was promoting research of jatropha by providing land for its cultivation. The Chairman of the leading state-owned oil company also said that IOC would soon expand its Panipat refinery by enhancing its capacity to 15 million tonnes. Answering queries on the frequent hike of petroleum products, Mr Behuria said that unless international prices of the crude oil came down, the prices in the domestic market would also continue to rise. Mr Behuria said that under ‘Operation Everest’ launched by the IOC, the company was expanding in all three directions — urban, highway
and rural. “We are now diversifying into petrochemical sector, and propose to explore gasfields in Iran, a proposal under consideration by the Iranian government,” he added.
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Sensitive list may put spanner in regional trade
New Delhi, January 3 SAFTA came into effect on January 1, 2006. “If sectors like agriculture, textiles, leather, pharmaceuticals, rubber, light machinery and automobile parts are put under the sensitive lists then the region would not be able to harness the benefits of SAFTA and the resulting vertical integration of industries across countries of the region in these key areas of South Asian competence,” said the industrial chamber in a press statement issued here today. FICCI has claimed that the total intra- regional trade among SAARC countries which is around $7 billion could grow to $14 billion by 2010 provided the existing tariffs are reduced within the stipulated time frame of SAFTA. It includes limited sensitive lists of all SAARC countries and measures to strengthen trade facilitation infrastructure, it added. “The pact holds huge potential for intra regional trade growth as over 90 per cent of the imports by South Asian countries are sourced from outside the region and a major part of exports of South Asia is to the countries outside the group,” stated the FICCI statement. In spite of SAPTA, the intra- regional trade in SAARC could not go above 4 per cent of the total trade of the region due to its halting progress and very limited coverage of the trade basket. With SAFTA now in place, FICCI has suggested that the scope of SAFTA must be expanded to cover trade in services and investment
liberalisation. The private sector needs to be given adequate incentives to set up enterprises across South Asia.
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Cellphone companies target countryside
Chandigarh, January 3 Reliance Infocomm has announced its plans for expansion of network in 6,000 semi-urban and rural towns. Mr S.P. Shukla, President, Wireless, Reliance Infocomm, said that Reliance was the first company to get as many as 1 million rural subscribers. “We already have services in 4,500 towns, and hope to expand this in another 1,500 towns and villages,” Officials in Spice Telecom, too, agree that the growth driver lies in the rural areas. Thus, the company proposes to spend a whopping Rs 100 crore on network expansion in rural areas. “Rural subscribers account for 25 per cent of our total subscriber base. In order to expand this base, we have introduced lifelong validity cards and mini tariff plans and a special service of bill payment vouchers for rural areas called Spice Token, where service centres are far from villages,” says a company official. Officials in Airtel, too, say that though they have a good rural penetration (with 40 per cent rural subscribers), they plan to increase the network and distribution system. “At least 300 towers in rural areas are being erected for better network,” says a senior official of the company. Hutch, which has a good base in the urban areas, is also looking towards the countryside for expansion. A company spokesman said that Hutch is the only company where “mobile shops and service shops” are reaching out to the rural customers in the region.
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CII wants faster economic reforms for growth
New Delhi, January 3 “The government should follow the recommendations of the Kelkar Task Force and reduce the peak duty rates below 15 per cent. Besides, VAT needs to be implemented in all states and union territories along with reducing CST to 2 per cent from April 1, 2006, and phasing it out completely from by March 1, 2007,” said the memorandum. Referring to the bottlenecks in the infrastructure sector, the industrial chamber urged the government to fully implement the Electricity Act, 2003, without amendments to help reduce cross subsidies in electricity supplies, for which the brunt of the burden falls upon the industry. The memorandum pointed out the fact that despite the peak rate having been lowered to 15 per cent since March, 2005, several product categories continue to attract significantly high duty rates, ranging from 20 to 150 per cent. Therefore, the CII suggested that all duty rates above the peak rate be reviewed and rationalised either unilaterally or as part of the ongoing WTO negotiations. Cautioning the government about indiscriminate signing of free trade agreements, the CII memorandum stated that FTAs should be signed only if the cost disadvantage being suffered by Indian manufacturers was eliminated by taking measures such as complete elimination of CST, imposition of uniform VAT in all states. Besides, the government should undertake labour reforms that allow greater flexibility in employment. The CII pointed out that the minimum customs duty on manufactured goods should not be less than 5 per cent as this resulted in anomalies in the duty structure. The CII also urged the government to remove anomalies in the customs duty structure where the inputs to a product attract higher duty than the product itself.
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Leyland strikes deal with Lankan firm
Colombo, January 3 The one-year deal allows PLC to open letters of credit up to Rs 3 billion, the firm’s Chief Executive D.P. Kumarage said today. “The facility will be mostly used to buy trucks and buses,” Mr Kumarage said. With a Rs 19 billion portfolio, PLC is currently Sri Lanka’s biggest leasing companies commanding a 19 per cent market share. Besides offering traditional forms of leasing, PLC has carved a niche in the bus leasing business. Since 1996, the firm has muscled its way into the vehicle importing business, bringing down some 5,000 buses in the process.
— PTI
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PNB regional office upgraded
Jammu, January 3 Mr.Khajuria said that with 67 branches and seven extension counters, the PNB has its presence in 11 of the 14 districts
of J&K. The PNB has achieved a business figure of Rs.1,900 crore and advances have touched Rs 430 crore. The priority sector advances of the bank as on September 30,2005, stood at Rs 250 crore out of which advances to the weaker sections stood at Rs 42 crore. The agriculture advances in the state stood at Rs 31 crore and credit to the small-scale industry touched Rs 105 crore.
— TNS
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Haryana reserves 10 pc industrial plots for NRIs
Chandigarh, January 3 This reservation clause would also extend to those setting up units with 33 per cent or more foreign direct investment in total investment, a spokesman of HUDA said here today. The allotment to NRIs would be made by a special committee comprising senior
officials of the Industries Department and other allied departments, including HUDA. The spokesman said the allotment of plots for projects having an investment of more than Rs 30 crore would be made by a committee headed by the Principal Secretary, Industries, and having the Director, Industries and the Managing Directors of HSIDC and HFC and the Chief Administrator, HUDA, as members. In the case of other categories, plots would be allotted after inviting applications through advertisements in leading newspapers. The allotment would be made by a four-member committee headed by the Chief Administrator, HUDA.
— UNI
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Bank Account
Chennai, January 3 Bank sources said such a proposal was made in a meeting convened by Mr T.S. Narayanasamy, CMD of IOB, here on Monday. Six other banks own the shares of the private sector BhOB. Chairpersons of IOB, Federal Bank, Karur Vysya Bank, Karnataka Bank and South Indian Bank attended the meeting. There was representation from the Bank of Rajasthan, but nobody from ING Vysya Bank, one of the share holders of BhOB attended the meeting. IOB holds 30 per cent stake in BhOB. Bank of Rajasthan has 16 per cent while ING Vysya Bank 14.66 per cent, Federal Bank 10.67 per cent, Karur Vysya Bank and South Indian Bank 10 per cent each and Karnataka Bank 8.67 per cent. Bank of Rajasthan and Federal Bank were earlier interested in buying out the shares of other banks in BhOB. But the move did not work out as other banks showed little interest.
IDBI, SIDBI MoU
The Industrial Development Bank of India Ltd (IDBI) has said it has signed a Memorandum of Understanding (MoU) with SIDBI for Small and Medium Enterprises business and related business opportunities. The technology product based on Finacle Core Banking Solution would enable the assisted SMEs of SIDBI to bank and participate in the various types of products and facilities of IDBI like
EFT, CMS, debit cards and RTGS, it informed the Bombay Stock Exchange.
OBC, Templeton tie-up
The Oriental Bank of Commerce (OBC) today tied up with Franklin Templeton Asset Management to distribute mutual fund schemes through its branches for boosting non-interest based income. “OBC expect to sell mutual funds units worth Rs 100-250 crore by March end 2006. The tie up with Templeton will boost our non-interest income to 12 per cent of total income by March end 2006 from 8 per cent in 2004,” OBC chairman
K.N. Prithviraj said after signing the MoU here. To start with, 220 branches of the bank across the nation will sell the mutual fund schemes. It would be extended to more branches later.
Mutual fund
A mutual fund scheme, Principal Infrastructure and Services Industries Fund
(PISIF), will be launched by Principal PNB Asset Management Company, in association with Vijaya Bank, on January 9. The new fund offer
(NFO) units are available at Rs 10 plus entry load and applicable at NAV thereafter. It will close on January 31.
— Agencies
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